Review: The Management of Hyde

Review Case 22-10, Researching GAAP, in your text. Prepare a
reply to the president that includes the required information presented in the
case in response to Situation I, II, or III. Use your readings from the text
and at least one additional academic resource to provide support for your
response. The websites provided in the module reading and resources may be used
along with any other reputable site. Remember to use proper APA-style
formatting.
Situation 1
Hyde determined that the depreciable lives of its fixed assets are presently
too long to fairly match the cost of the fixed assets with the revenue
produced. Hype decided at the beginning of the current year to reduce the
depreciable lives of all of its existing fixed assets by 5 years.
Situation 11
On December 31, 2015, Hyde owned 51% of Patten Company, at which time Hyde
reported its investment using the cost method, owing to political
uncertainties. On January 2,2016, the management of Hyde was satisfied that the
political uncertainties were resolved and the assets of the company were in no
danger of nationalization. Accordingly, Hyde will prepare consolidated
financial statements for Hyde and Patten for the year ended December 31,2016.
Situation 111
Hyde decided in January 2016 to adopt the straight line method of depreciation
for equipment.
The straight line method will be used for new acquisitions, as well as for
previously acquired equipment for which depreciation had been provided on an
accelerated basis.
Directions:
For each of the preceding situations,, research the related generally accepted
accounting principles and prepare a short memo to the president that explains
the following type of accounting change; manner of reporting the change under
current generally accepted accounting principles, including a discussion, where
applicable, of how amounts are computed: effect of the change on the balance
sheet and income statement: and note disclosures that would be necessary. Cite
references and applicable paragraph numbers.